The headline number in a group offer is not what you are being paid. It is a starting figure, and the real terms sit in four places: how the earnings figure underneath it was calculated, how much of the price is cash at close rather than rollover equity or earnout, what your compensation looks like afterward, and what changes about how the practice runs.
Evaluate all four or you have evaluated none of them. This is general background, not advice about any offer in front of you.
What is the earnings number, exactly?
If an offer is expressed as a multiple applied to an adjusted earnings figure, the adjustments deserve more attention than the multiple.
The central adjustment replaces your owner compensation with an assumed market-rate associate figure. If the buyer models your future pay below what you effectively earn now, the earnings figure rises, the price rises, and your income falls. Same practice, better-looking offer, worse result for you.
Ask for the adjustment schedule line by line. Ask what associate compensation was assumed and whether it matches what you will actually be paid under the employment agreement. Ask whether each add-back represents a cost that genuinely disappears after closing, or a cost that simply moves to your side of the ledger.
A multiple is not a fact about the market you can look up and then rely on. It is an output of a specific practice, a specific buyer, and that buyer’s own cost of capital. Treat any quoted range as a conversation opener.
How much of the price is actually cash?
Offers often combine cash at closing with equity in the acquiring platform, and sometimes with an earnout tied to future performance.
Rollover equity tends to be presented as the exciting part, on the argument that it appreciates and pays a second time when the platform sells. That outcome exists. So does equity in a private company you do not control, with no established market, subject to dilution, dependent on a liquidity event whose timing is not yours.
Questions worth answering before you assign it any value: what class of equity is it, and where does it sit relative to the sponsor’s preferred return; what happens to it if you leave, are terminated, or become disabled; has this platform been through a prior recapitalization, and what did rollover holders receive; and is there a scenario where the equity is worth nothing while the platform still sells successfully.
If nobody will answer those in writing, you are being asked to accept consideration without being told what stands behind it.
What are you agreeing to work under?
These transactions generally require you to keep practicing for a defined period. That employment agreement is a second contract and deserves the same scrutiny as the purchase agreement.
Read the compensation formula and note what it is calculated on: production, collections, or a figure net of specified expenses. Read the term, and what happens to unpaid consideration if you leave early. Read the non-compete radius and duration. Read who controls clinical decisions, scheduling, materials, labs, and staffing, and whether production expectations attach to your pay.
Then model your post-close earnings honestly against what you earn now, and carry that difference across the years you intend to keep working. Compare it to the premium the offer represents over other paths. Sometimes the offer still wins clearly. Sometimes the arithmetic only reveals itself when someone does it.
Who should be reading the documents?
Someone who represents only you. Transaction counsel with group dentistry experience, and a CPA who has modeled deals like this, both engaged before you sign a letter of intent.
The letter of intent is where a deal is really decided. It is often non-binding on price and binding on exclusivity, which means signing it stops your other conversations while the buyer conducts diligence. Negotiate what you care about before that signature, not after.
A single offer is not a market. Until you know what other buyers, including individual dentists, would do, you do not know whether a number is good. You only know it is greater than zero.
FAQ
Is a group offer higher than a private sale?
Not automatically, and the headline is not the comparison. The honest version accounts for post-sale compensation, the share of price held in equity or earnout, and the years you will work under someone else’s terms. Run both paths as total dollars over the same horizon.
What happens to my staff?
Ask directly, in writing, before closing. Benefits, time-off accrual, pay structures, and reporting lines are commonly revisited during integration. Some owners negotiate specific protections for their team. Others discover after closing that nothing was ever promised and nothing was ever written down.